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Ch 13 Branding 18june09 N43 57

1.
<ul><li>Brand Recognition/2007+/- </li></ul>

2.
Branding <ul><li>A brand is a name, term, design symbol or any other feature that identifies a seller’s product from a competitive product. </li></ul>-Verbal part of the brand <ul><li>a symbol, design or distinctive coloring or lettering. Ex. A brand name written in a distinctive way (Logo) </li></ul>Logos & Symbols are learned (Learning Theory) Brand Names Brand Marks

4.
Brand Terminology <ul><li>Copyright … the exclusive right to reproduce, publish and sell the matter and form of a literary, musical or artistic work. </li></ul><ul><li>Premise : An idea is property that one can sell, trade or profit from - an intellectual real estate </li></ul><ul><li>Trademark : 10 year legal protection to brand name or brand mark but renewed indefinitely </li></ul>

5.
Brand Terminology <ul><li>Trade Character …a brand mark personified </li></ul><ul><li>Patent …inventions that have to do with function or design “Registered U.S. Patent Office” </li></ul><ul><li>4,546,490 U.S. patents through Dec. 1985 </li></ul><ul><li>3300 mousetrap patents issued since the first one in 1790 </li></ul>

23.
Branding and Consumer Perception Of Quality  The Association of Food, Beverage and Consumer Products Companies, “ Consumers Give Brand Name Food, Consumer Products Top Ratings”, Mar. 24, 2005, http://www.gmabrands.com/news/docs/NewsRelease.cfm?DocID=1472 When asked to describe the quality of national brand products, a % of consumer described them as excellent.

28.
Effects Of Generic And Brand-Name Competition On Drug Pricing  “ How Increased Competition from Generic Drugs Has Affected Prices and Returns in the Pharmaceutical Industry”, July 1998, http://www.cbo.gov/showdoc.cfm?index=655&sequence=7

34.
What’s in a Name? <ul><li>Think about your name. Now think about how others perceive you </li></ul><ul><li>Every name sends forth “psychological vibrations” </li></ul><ul><li>EXAMPLES </li></ul><ul><li>Elmer probably won’t get as good grades as David </li></ul><ul><li>Anita, extremely sexy. Anne, beautiful but untrustworthy. Andrew, sincere but immature. Eric a big winner </li></ul>

37.
April 4, 1975 <ul><li>Founder Bill Gates drops out of Harvard after receiving an offer to develop a new microcomputer. </li></ul><ul><li>Gates moves to New Mexico with high school friend Paul Allen and they create Microsoft. </li></ul><ul><li>Selecting a brand name – Bill Gates wanted to create something that would be easy to remember and make sense. Micro (for microcomputers) and soft (for software) </li></ul>

47.
Chocoladefabriken Lindt & Sprungli Trademark Case <ul><li>Lindt acquired a trademark in Europe in 2001 on its gold-foil-wrapped chocolate bunny </li></ul><ul><li>In 2003 Lindt sued, another chocolate company, Hauswirth, for a trademark violation for selling a chocolate bunny that looked very similar to the one Lindt had trademarked </li></ul><ul><ul><li>Hauswirth countersued </li></ul></ul>Applied Marketing

48.
The Chocolate Bunnies This is the Lindt bunny, notice the gold foil, stance, ear positioning, red ribbon, and bell attached to the ribbon Although similar in many ways, the Hauswirth bunny lacks the bell of the Lindt bunny This rabbit, produced by Riegelein in Germany, avoided a lawsuit from Lindt by painting the bow on as opposed to acctually having a bow around the rabbits neck

49.
Hauswirth’s Case <ul><li>The company had been making chocolate bunnies for a long time </li></ul><ul><li>Claimed Lindt had acted in “bad faith” by registering a trademark that had been used long before </li></ul><ul><li>Argued that most chocolate bunnies are shaped the same way because of manufacturing limitations </li></ul>

50.
Difficulty of the Situation <ul><li>Trademark laws do not allow a three-dimensional shape to be trademarked if it serves a functional purpose </li></ul><ul><ul><li>Trademark specialists struggle over requirements that shapes be “distinctive” but not functional </li></ul></ul><ul><ul><li>Proctor & Gamble Co. failed to trademark a bar of soap whose sides are convex instead of the usual concaved sides </li></ul></ul>Status: Case pending June 09

52.
Battle of the Brands Traditional Branded Drugs- manufacturers risk money on R&D and then charge high prices to recoup investment (1.7 bil in 01-02) Traditional Generics -Contain the active ingredient of the branded drug and act in the body in an identical way the branded drug does. – Traditional Generics face much risk in marketplace competition “ Branded Generics” -Contain the active ingredient of the branded drug, however, through aggressive litigation, they prove to act differently in the body. Strategy: - Spend money on litigation, little on R&D, charge prices slightly lower than Branded Drugs, but higher than traditional Generics WSJ, Spring 2003 Altered Copies Outmaneuver Patents in Legal Battles

53.
<ul><li>Key issue: generic drugs do not have to pass rigorous tests of the FDA, if they share the active ingredient of branded drugs </li></ul><ul><li>lawyers argue that their drug contains different ingredients and acts differently than the patented drug to avoid challenging a patent </li></ul>Generic Drug Maker in India Outmaneuvers U.S. pharmaceutical market <ul><li>Dr. Reddy’s Laboratories Ltd. won a breakout (2002) court case in New Jersey through a legal loophole </li></ul>

54.
Rx Rivals Annual percentage change in prescriptions dispensed in the U.S.

55.
A Numbers Game <ul><li>“ It’s a numbers game,” - The average profit over the life of a generic drug can be more than 10 times the court costs of successful litigation. </li></ul><ul><li>As a result, generic drug companies are thriving with low R&D and marketing costs. The average profit margin for top generic products was 16% compared to 20% for branded products. </li></ul>

56.
Philips Electronics NV <ul><li>Philips Electronics NV is Europe’s biggest consumer-electronics company but, they have losses for the past 15 years in America </li></ul><ul><li>North America makes up about 26% of Philips consumer-electronics sales </li></ul>Philips Tries to Zap Clunky Image in U.S. Applied Marketing

57.
Philips Electronics NV <ul><li>At mass retail outlets, the name will change from “Philips-Magnavox” to “Magnavox” for low price TVs and Stereos </li></ul><ul><li>They will “save” the brand name “Philips” for higher-end digital gear </li></ul>